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New York - Experts: Ponzi Scheme By Chairman of YU Business School Is Largest Ever In History

Published on: December 12, 2008 09:22 AM
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New York - Former chairman of the Nasdaq Stock Market Bernard Madoff who was arrested yesterday and accused of orchestrating a ponzi scheme that bilked some $50 billion out of investors, is the largest ever ponzi scheme.

The founder of Bernard L. Madoff Investment Securities allegedly has been running the scheme for years, using new money coming into the fund to pay returns to other investors, keeping up the façade of an admirable performance.  In his alleged confession to the FBI, Madoff took the blame, saying he “paid investors with money that wasn’t there.”

According to the SEC complaint, Madoff informed two senior employees at his firm yesterday that he was “finished,” and that his business is “all just one big lie,” and “basically, a giant Ponzi scheme.”  He also allegedly admitted that the firm was insolvent and had been for years.

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“We are alleging a massive fraud – both in terms of scope and duration,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.  “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors and we are working closely with the criminal authorities to hold Mr. Madoff accountable.”

Madoff, 70, posted bail at $10 million, backed by his Manhattan apartment and guaranteed by his wife.

“Bernard Madoff is a longstanding leader in the financial services industry,” his lawyer Dan Horwit told reporters outside the Manhattan courtroom. “We will fight to get through this unfortunate set of events.”

Madoff served as Chairman of the Sy Syms business school, a division of Yeshiva University



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Read Comments (23)  —  Post Yours »

1

 Dec 12, 2008 at 09:27 AM Anonymous Says:

Very sad. Major jewish charities are going to be reeling from this. He had a lot of charity dollars. Nebuch. Chillul hashem.

2

 Dec 12, 2008 at 09:57 AM Heshy Says:

Just what we needed :-(

3

 Dec 12, 2008 at 10:14 AM Golem Says:

$50 BILLION?????? this cant be true

4

 Dec 12, 2008 at 10:08 AM Hasdei Hashem Says:

Charity dollars?!? Charity dollars?!?!?! He ripped off who knows how many people to the tune of 50 Billion Dollars!!! Our community has to stop looking away just because the crook gives charity.

5

 Dec 12, 2008 at 10:07 AM understanding Says:

we should help him. lets start some kind of fund for him

6

 Dec 12, 2008 at 10:06 AM Gavriel Says:

Shoimi shomayim,Whats this world coming to? He was a big bal zedaka for everyone who only asked fom him... But whose money was it? nebach nebach this is so so so sad for him and his family they will have to go thru so much grief now.All because thsi eigal hazahav called money money.

7

 Dec 12, 2008 at 10:25 AM Anonymous Says:

he does not need a fund. he posted 10 million dollars bail!!!

8

 Dec 12, 2008 at 10:52 AM Yank Says:

Rabbi Yudin on Nachum Siegel this morning was saying that we needto focus more Tzedakah on our Jewish Schools.

9

 Dec 12, 2008 at 10:42 AM CPA Says:

The funny part is the comment from the Director of the SEC's Enforcement Division where she says they are moving "quickly". This has been going on, according to Madoff (quoted in other papers), for over 20 years! I have clients invested with him and every time I asked about what was going on, I was told to keep quiet 'cause "we're making money."

10

 Dec 12, 2008 at 11:27 AM Anonymous Says:

Chutzpa to call money a yetzer horo - the guy is a self admitted crook - if not securities and cash he would find something else to steal.
His yetzer hora is internal like every one elses.

We will see how honest the recipients of his largess are - if they return the money to rightful ownership.

11

 Dec 12, 2008 at 11:44 AM Anonymous Says:

Bailout please! hes no different then GM, and Fannie they all have and continue to steal the country blind. yes blind!
believe me when i tell you they are all stealing and none are kosher. so dont be shocked when more collapses and failures hit the stands.
hes a nice guy and a lovely family his own kids turned him in according to cbs news.
isnt that lovely. its a shame fannie and gm had no kids otherwise theyd have turned them in a long time ago.

12

 Dec 12, 2008 at 12:03 PM murray Says:

Reply to #7  
Anonymous Says:

he does not need a fund. he posted 10 million dollars bail!!!

If he still has a passport he will be leaving for any one of many destinations that would love to have him (and his $$$), and have no extradition treaty with the late, great USA. $10 M bail, that is a cheap nothing price (compared to $50B), and well worth it compared to 460 years in jail, not to mention Restitution, and fines, penalties, etc.

13

 Dec 12, 2008 at 12:00 PM Anonymous Says:

Reply to #11  
Anonymous Says:

Bailout please! hes no different then GM, and Fannie they all have and continue to steal the country blind. yes blind!
believe me when i tell you they are all stealing and none are kosher. so dont be shocked when more collapses and failures hit the stands.
hes a nice guy and a lovely family his own kids turned him in according to cbs news.
isnt that lovely. its a shame fannie and gm had no kids otherwise theyd have turned them in a long time ago.

Its' this mentality among the CEO's that while I'm here, let me make money for myself anyway I can using any means and then get out before the house of cards collapses...

14

 Dec 12, 2008 at 12:46 PM Zushe Says:

Bail him out. why only Gm or Ford or Chrysler or all the banks?

15

 Dec 12, 2008 at 01:23 PM tara Says:

Reply to #1  
Anonymous Says:

Very sad. Major jewish charities are going to be reeling from this. He had a lot of charity dollars. Nebuch. Chillul hashem.

Do you know which specific charities?

16

 Dec 12, 2008 at 03:04 PM cp Says:

Reply to #5  
understanding Says:

we should help him. lets start some kind of fund for him

We should "start a fund for him"?!?! Are you crazy?? We should start a fund for the yidden whose money I've heard he wiped out.

17

 Dec 12, 2008 at 03:57 PM Talmud Bucky from Wisconsin Says:

Sukkah She Gazlu, it aint kosher. Niether is mamon she gazlu. Think about it, how is it any different? Would you sit in a stolen Sukkah? Then realize that this Tzedakah is traife as well. Maybe if more people had regular JOBS instead of relying on the largesse (that means good will for you who are educated only in Divrei Kodesh) of criminals.

18

 Dec 13, 2008 at 02:34 PM Chana L. Schochet Says:

Admitted a 50 Billion Dollar Fraud. Chairman of YU University. Seems appropriate for all the smug, self righteous Hechsher Tzedek YU alumnai. Enjoy the just desserts.

19

 Dec 13, 2008 at 08:49 PM Anonymous Says:

re #18: Admitted a 50 Billion Dollar Fraud. Chairman of YU University. Seems appropriate for all the smug, self righteous Hechsher Tzedek YU alumnai. Enjoy the just desserts. (Chana L. Schochet)

--

Thanks, Chana. Hope that made you feel better. Glad you didn't indulge in generalization too much. Talk about smug and self-righteous ...

Now, if you have a few minutes to re-read whatever article you saw that mentioned YU, why don't you see if you can find your factual error concerning his role there. I wonder if all those smug, self-righteous YU folks have better reading comprehension than you do?

20

 Dec 13, 2008 at 08:55 PM Anonymous Says:

Hechsher tzedek is from the Conservatives, not from YU. He wasn't the chairman of all of YU, just the business school. And treasurer of the university. And you can eat your smug, self-righteous lies. That another big baal tzedaka (after Rubashkin who was small potatoes compared to this guy) built his "good deeds" on blood money is a shanda for all of us, not for "your camp." That one of the greatest Torah institutions in the world will be hard-hit by this, is painful for all Torah Jews.

21

 Dec 14, 2008 at 12:22 AM Wondering: Why You? Says:

I am not at all pleased to hear of this story.

I cannot help but notice that the exposure of this largest scam in Wall Street history comes a day or two after the Y.U. self righteously hosted a well publicized forum on "ethics" -- holding up the Rubashkins as the poster of the worst unethical business behavior (without regard for Loshon Hora and Motzi Shem Ra). I personally am of the opinion that Rubashkin has been railroaded and that railroading has been assisted all along -- a death by a thousand cuts -- by the likes of the Forward, Hekhsher Tzedek (so called), Uri L'tzedek (so called), and a gaggle of other self righteous fakes. Each one out to make a name for themselves on someone else's blood.

Make no mistake about it: the government would not be pursuing the Rubashkin's with such incredible zeal, if not for the sense that "the Jewish community" is against them. That is why the judge feels he can keep a good, decent, family man in jail without bail, because he knows that "no one cares". The Gov of Illinois - out on bail. This Wall St. person - out on bail. But not him.

Perhaps G-d is looking down at the likes of Y.U. (and aside for this story, I respect the institution) and saying: you trod on someone's blood and voluntarily participated in a defamation orgy, don't be so self righteous, "Mum Shebecha al Tagid Lechavaircha." This 50 bill. scandal puts anything else to shame.

I propose the next item on "Uri L'tzedek" and "Hekhsher Tzedek's" agenda should be: Hekhsher Tzedek for institution's donors, trustees and presidents.

22

 Dec 14, 2008 at 09:49 AM Anonymous Says:

Reply to #4  
Hasdei Hashem Says:

Charity dollars?!? Charity dollars?!?!?! He ripped off who knows how many people to the tune of 50 Billion Dollars!!! Our community has to stop looking away just because the crook gives charity.

Very intelligent comment. You obviously have no clue as to who invested with him. A very significant amount of charity dollars that had been collcted had been invested with him so that the income generated could go to the charitable purpose. Nebach for all thise charities that had invested with him to generate funds for operations and future projects who will no longer have those funds available. Nobady was saying forgive him because he gave charity.

23

 Dec 24, 2008 at 11:17 AM Anonymous Says:

the 1st victime... Thierry de la villehuchet... who s next?

24

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